Oracle stock remains under pressure, but this analyst sees the stock climbing around 100%

Oracle stock came under renewed pressure on Monday, extending a bruising selloff that has weighed heavily on the stock for several weeks.

The cloud computing giant has lost more than 15% over the past five days, following a steep 23.1% drop in November that erased gains sparked by its blockbuster September earnings report.

The stock’s decline reflects a sharp reversal in sentiment after Oracle stunned investors earlier this year by revealing that its total backlog had more than quadrupled to $455 billion.

That figure was driven largely by a reported $300 billion cloud computing agreement with OpenAI, an announcement that initially sent shares sharply higher as investors focused on the long-term revenue opportunity.

Oracle stock continues to remain under pressure

The optimism that followed the September disclosure has since faded.

Investors have grown increasingly cautious about the structure and durability of the Oracle–OpenAI partnership, as well as the broader sustainability of the artificial intelligence investment cycle.

Concerns have also intensified around Oracle’s rising debt levels and its aggressive capital spending plans.

Those worries have spilt into the credit markets. Oracle’s corporate bonds have come under scrutiny as Wall Street searches for potential fault lines in the AI boom.

JPMorgan Chase & Co. credit analyst Erica Spear said pressure on Oracle’s bonds is likely to persist into the new year, as per a Bloomberg report.

Oracle’s stock suffered its sharpest drop in nearly 11 months last week, while a measure of the company’s credit risk climbed to a fresh 16-year high.

The moves followed earnings that showed Oracle falling short of analysts’ cloud revenue estimates, while simultaneously raising its annual capital expenditure target by $15 billion and more than doubling its future lease commitments.

Credit analysts remain cautious

Although the earnings report was broadly in line with expectations and confirmed that demand and backlog continue to grow, Spear described the results as underwhelming from a credit perspective.

“While there were not necessarily any unexpected or glaring red flags in the print, overall the results and commentary did not clear the bar needed to increase our comfort with the credit story,” Spear wrote.

“The combination of a modest top-line miss, sharply higher FY26 capex, and still-evolving AI unit economics leaves this a ‘show me story.’”

She added that investor frustration stems from management’s continued emphasis on debt financing.

“The challenge for investors is precisely that: management continues to frame funding almost exclusively through debt, which, while unsurprising, remains frustrating given the broadly unknown timeline and ceiling for these investments,” Spear wrote.

On Oracle’s earnings call, co-chief executive officer Clay Magouyrk said the company remains committed to preserving its investment-grade credit rating.

He added that Oracle is unlikely to borrow the more than $100 billion some analysts have projected.

Some Wall Street analysts remain bullish on Oracle stock

Despite the selloff, some analysts remain constructive. Mizuho reiterated an Outperform rating on Oracle with a $400 price target in a research note published Monday.

The firm highlighted Oracle’s clarification around its AI infrastructure financing strategy, including potential customer bring-your-own-chip arrangements, vendor financing and GPU rental structures, which could reduce upfront capital expenditures and better align spending with revenue generation.

Mizuho also noted that Oracle explicitly addressed concerns about a potential $100 billion debt requirement and reaffirmed its commitment to maintaining an investment-grade balance sheet.

The tech company further denied a Bloomberg report suggesting delays in delivering data-centre capacity to OpenAI, stating that all milestones remain on track.

While Mizuho left its fiscal 2026 estimates unchanged, it raised projections for fiscal 2027, arguing that Oracle’s valuation — roughly 26 times next twelve months earnings and nine times fiscal 2030 earnings — represents an attractive entry point amid heightened volatility.

The post Oracle stock remains under pressure, but this analyst sees the stock climbing around 100% appeared first on Invezz